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Delta's frequent flier program to measure dollars spent, not miles flown

By Kelly YamanouchiAtlanta Journal-Constitution

Posted:
02/26/2014 12:01:00 AM CST

Updated:
02/26/2014 11:14:22 PM CST

In a major change to its frequent-flier program, Delta Air Lines will soon begin awarding free flights based on dollars spent, rather than miles flown.

The move by Delta, the Twin Cities' dominant airline, is aimed at rewarding its higher-spending customers, an acknowledgement of how valuable those deep-pocketed travelers are to the company.

It's also a competitive move to attract lucrative business travelers as Atlanta-based Delta jockeys with other carriers, including United and American, for those customers.

"We'd like to provide more benefits to our premium customers," said Jeff Robertson, vice president of the Delta SkyMiles program. "A lot of our customers fly us 10, 20 times a year, and we should reward them for that."

Meanwhile, those most likely to not benefit from the program, which takes effect Jan. 1, 2015, are bargain hunters who earn thousands of miles by flying long distances on cheap fares.

It's a historic change for frequent fliers who for decades have earned flights based on miles flown.

Starting next year, the average Delta frequent flier will earn five miles for every dollar spent on a Delta flight. That means for a $300 fare, travelers will earn 1,500 miles.

But some other frequent fliers will earn more miles per dollar spent.

Those who use the Delta SkyMiles American Express credit card will earn seven miles for every dollar spent.

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And elite-level frequent flier members can earn anywhere from seven to 13 miles per dollar spent, depending on whether they are at silver, gold, platinum or diamond levels and if they have the Delta credit card.

"There will be some people who will be unhappy. ... The folks who travel infrequently and buy the least expensive fares will not earn as many SkyMiles credits as they used to," said Henry Harteveldt, an industry analyst with travel-agency consultants Hudson Crossing.

"Those who travel on higher fares, in particular business travelers, and those who travel more frequently will benefit."

Some of those Delta leisure travelers wasted no time complaining on social media. But if United and American follow Delta's lead, "there's not much a consumer can do," said Randy Petersen, editor of InsideFlyer magazine, which tracks the airline-loyalty industry. "Where are you going to go?"

Al Meyers, who has worked for nonprofits in Atlanta and used to be an elite Delta member, said SkyMiles will go from a frequent-flier program to an expensive-flier one.

He said the biggest airlines are catering too much to corporate travelers, forcing average consumers to consider budget carriers.

"We're going to have the Lexuses and the Tauruses," he said.

There will be no change for miles already earned in customers' frequent-flier accounts, and the way travelers redeem miles for flights will remain much the same.

Delta became the dominant carrier in the Twin Cities when it acquired Northwest Airlines in 2008. Northwest loyalty program members had their miles switched over to Delta.

Delta's move comes after Southwest Airlines made a similar shift to awarding points based on dollars spent, and after Delta this year started requiring a minimum level of spending annually to reach elite levels in its frequent flier program.

Virgin America and JetBlue Airways' "True Blue" frequent-flier program also award points based on dollars spent, not miles flown.

Hotel loyalty programs and others already have added a spending component, Robertson said. But Delta is the first national U.S. carrier to make the change, and other airlines are likely to closely watch the move.

Delta's change is likely to cause some concern and confusion for some of its frequent fliers.

"With any change comes challenges," Robertson said, adding that it is difficult to predict how many customers the airline may lose or gain through the change.

Delta's frequent-flier program has long been a point of frustration for many customers, with some complaining that it's hard to schedule free trips even after they've earned the mileage.

Delta acknowledges the complaints and says it plans to make it easier for people to redeem miles for flights through changes next year.

One key change is Delta will add options to redeem a combination of miles and cash for flights, which means you won't have to wait until you have at least 25,000 miles to get a free flight.

The airline also will allow customers to get one-way flights for half the miles of a round-trip. And it will add tiers in between the 25,000, 40,000 and 60,000 levels to make more flights available at different levels.